Online Classes Mean No Dorm, Gym or Debt

Dec. 3 (Bloomberg) -- Numerous articles and commentaries
from inside and outside of academia are raising the alarm that
American public higher education faces an unprecedented
financial crisis.

For years, state legislatures have been disinvesting in
public colleges and universities, leaving campus administrators
to struggle with how to make do with less. The result: rising
debt, deferred maintenance for aging facilities, reductions in
programs and course offerings, dismissals, elimination of many
student and faculty services, and loss of talented faculty --
many of whom haven’t received pay increases in years -- to
private universities.

To try to offset some of these challenges, universities are
raising tuition and fees to historically high levels. The cost
of tuition alone has soared from 23 percent of median annual
earnings in 2001 to 38 percent in 2010.

Given the pressing demands on state budgets, it is unlikely
that funding for higher education will return to pre-2007 levels
anytime soon. In fact, analysts predict just the opposite:
Financing levels will continue to decrease in the years ahead to
the point where a number of colleges and universities may be
forced to close.

In some states, campuses are being consolidated. In
others, enrollments have been capped. With the average cost of
providing one year of on-campus education at a public university
now topping $32,000 and the average tuition covering only 20
percent of that, the problem is real and it isn’t going away.

Enrollment Shift

In addition, enrollments are declining for the first time
in 15 years, student debt is topping a trillion dollars, parents
are questioning why their children are struggling to find jobs,
and employers are complaining about the costs of retraining
college graduates. Such conditions cannot continue.

Some universities are finding a way out of this morass
through online classes. Growth in online education is now
outpacing traditional enrollments by a wide margin. Why? Because
it is well-suited to the needs of an increasing number of
learners, extending access and allowing students to both work
and study.

In addition, learning measures for online students have
matched or exceeded those for on-campus students. Although
graduate programs have seen the largest growth in online
learning, significant increases in online undergraduate programs
are expected over the next decade. Unfortunately, many
universities remain averse to such change and hold to tradition
and a classical notion of education.

In a recent hearing before state legislators, university
officials questioned the value of moving online, testifying that
there would be little, if any, savings from such a shift. These
conclusions simply don’t hold up. For example, traditional
university costs and services for students that a quality online
education doesn’t require include:

-- Sports teams, playing fields, gyms and training
facilities

-- Dormitories, student lounges and food courts

-- Building maintenance, personnel and service vehicles

-- Utilities including phones, air conditioning and
plumbing

-- Landscaping and campus beautification projects

-- Mail service, supplies and procurement services

Such facilities and services consume as much as half of
what it takes to send a student to college. Including such costs
for online students in this type of comparison only serves to
cloud the huge value proposition that Web-based learning
represents. The real numbers tell a drastically different story:
Online education holds the promise for universities to not only
shrink their deficits but also extend their programs to a vast
number of students, all at significantly lower costs.

Significant Savings

So what is the true incremental cost of serving an online
student at a state university today? A study carried out by the
University of Texas, comparing online versus on-campus
instruction across 15 institutions serving more than 150,000
students, demonstrated a 30 percent to 50 percent cost savings
for the Web-based approach. Given that students are asked to
shoulder debt for services and amenities that are, objectively,
nonessential to their education, people should take notice.

On-campus tuition will continue to rise to cover increasing
costs for services and facilities. This, in turn, will further
reduce enrollments, and campuses will become less diverse,
accessible only to students from affluent families. Online
education presents a huge opportunity to reverse these trends
and improve the economic health of public colleges and
universities.

Those institutions that recognize this and move their
programs online will be successful and flourish. They will
ensure job security for their faculty, find themselves able to
reduce tuition, and extend access to underserved and under-represented students who need education to advance in their
jobs, raise a family and provide a quality education for their
own children.

Online education isn’t a solution for all that ails our
public universities, but it must be a major component in solving
the financial crisis facing higher education.

(Jeb Bush, a director of the Bloomberg Family Foundation,
was governor of Florida from 1999 to 2007. Randy Best is founder
and chairman of Academic Partnerships LLC, a company that assists
universities in the development and marketing of their online
courses and degree programs. The opinions expressed are their own.)